A week in tech

A summary of all the major tech stories in Asia this week broken down by country and sector.

A week in Japanese tech

- Laptop PC production jumped 19% worldwide in 2002, according to a survey by Nikkei Market Access. World notebook PC production in 2002 is expected to reach 28.73 million units, which is a rapid recovery from the 3.5% growth experienced in 2001. The upward trend in demand for notebook PCs is attributed to declining prices and the increasing number of users who are buying a second PC.

Mobile / Wireless

- Japan leads world in Internet access via cell phones, according to a government report. Japan has more people who access the Internet through their cellular phones than anywhere else in the world, but come second in terms of sheer numbers of Net users compared to the United States, with 55.9 million Japanese regularly surfing. With the number of people using broadband having more than quadrupled over the past twelve months, Japan is now third in the world in having broadband Internet access with 3.9 million users.

- Cell phones with cameras: the Next Big Thing? Since the launch of the first camera phone in November 2000 by the J-Phone group, which holds the third largest share of the cell phone market in Japan, the product has become a huge hit with young people, with 6.3 million camera phones shipped so far. Fuji Photo Film and Konica are both looking to dip into the booming market, which is set to become as big as the digital camera market.

Venture Capital / Investments

- Venture capital investments in start-ups drop 42% to Y262.8 billion in fiscal year 2001, from the record high of fiscal 2000. This marks the first time this figure has fallen in three years. The outstanding balance of such investments edged up 4.6% from the end of fiscal 2000 to Y1.12 trillion. Start-ups in information-technology-related fields were the hardest hit, while investments in firms in the biotechnology and other cutting-edge industries continued to increase. Softbank Investment Corp, JAFCO, and NIF Ventures are the top three in investments made in 2001.

- Nanotech lures venture capital firms. More than half of all venture capital firms surveyed by Nihon Keizai Shimbun Inc. and the Nikkei Research Institute of Industry and Markets have invested or are considering investing in nanotechnology-related start-ups. This includes 15.6% of the surveyed firms that have already invested in the cutting-edge field last fiscal year.

Hardware

- Recycle - itÆs good for profits: NEC, IBM Japan will resell own-brand used PCs, in a bid to tap into the fast-growing second-hand PC market. The firms will encourage their corporate customers to return their used PCs and then resell them. The second-hand PC market, growing 20% a year, is expected to expand to take up to 10% of new model sales.

- IBM to cut PC prices by up to 27%, citing low costs, weak dollar. Following Dell ComputerÆs announced to cut prices for its corporate customers last week, IBM Japan announced that it will reduce prices of its personal computers by up to 27%. The company claims that the weaker dollar has reduced import prices of semi-finished NetVista machines from the U.S. in yen terms. That, combined with lower prices of microprocessors and other components, allows IBM to make the price cuts. The computer maker will consider cutting prices of notebook PC ThinkPad machines.

Media, Entertainment and Gaming

- Digital TV to become reality, as terrestrial digital broadcasting is scheduled to debut late next year, according to the Ministry of Public Management, Home Affairs, Posts and Telecommunications. The Ministry has earmarked Y200 billion ($1.6 billion) in government funds for the project to be allocated over an eight-year period through 2011. The funds will be spent largely on changing analog broadcasting frequencies so that such broadcasts will not interfere with the digital broadcasts.

A week in Korea tech

e-Commerce

- Cyber shopping malls predict upturn. A survey of 802 online shopping malls conducted by the Ministry of Commerce, Industry and Energy shows that the majority of respondents are confident that their business performance would improve in the July-September period. The business survey index (BSI) on sales outlook hit 146.6, and the current income BSI rose to 131.4. An index of 100 is regarded as a borderline pointing to boom or bust trend. The third quarter BSI for the actual number of buyers came out at 148.9, the number of website visitors 153.9, cash flow 126.4, marketing cost 127.6, computer system investment 124.3 and employment 110.8.

Semiconductor

- South Korea's Samsung Electronics is considering more than W1trillion of additional investment in its semiconductor, handset and TFT-LCD production lines. The company had planned to spend W2.5 trillion building 12-inch wafer production lines next year and some of this investment may be brought forward. In addition, the planned W1.47 trillion investment in TFT-LCD plants this year may be increased by up to W500 billion to increase capacity of its fifth-generation lines. Investment in mobile phone handset production lines will also double to W400 billion.

Mobile / Wireless

- The parent company of Hong Kong-listed China Unicom has signed a memorandum of understanding with South Korea's SK Telecom to form a joint-venture wireless Internet business in China. The proposed joint venture aims to provide value-added services to customers on the mainland No 2 carrier's 2.5 generation code division multiple access (CDMA) platform when it is launched later this year. The two parties are proposing to build a CDMA wireless Internet service as well as the necessary content to serve China Unicom's customers. SK Telecom would also provide consultancy and training on wireless Internet services to China Unicom based on its experience in Korea.

Venture Capital / Investments

- Amid sales slump, recording industry widens offensive on online music pirating. With global music sales down 5 percent in 2001 and even worse prospects for 2002, the recording industry is considering suing individual song-swappers, and hiring companies such as Overpeer, a New York-based software firm funded by South Korea's SK Group, to distribute ædecoyÆ files that are empty or do not work over peer-to-peer networks. Despite the RIAAÆs past efforts, unauthorized sharing continue to dog the industry. Analysts note, furthermore, that any "legitimate" online market will remain constrained until the industry comes up with an alluring commercial alternative.

+ World Cup brings boon in foreign investment to South Korea. Helped by the country's improving image from holding the World Cup finals, South Korea said it drew $1.3 billion in foreign direct investment (FDI) in June, up around eight percent from the same month last year. 2002 FDI is predicted to rise to between $13 billion and $15 billion from $11.87 billion in 2001 as the government steps up privatization efforts. The central Bank of Korea revised on Thursday its 2002 GDP growth forecast upwards to 6.5% from an earlier 5.7%, forecasting strong revival in exports and investments as well as buoyant local demand.

- SK Global takes over Thrunet's leased-line unit for W355.6 billion ($291 million). Although SK Telecom had withdrawn from a March negotiation to buy the unit because Thrunet insisted on selling the whole leased-line unit, SK Global snapped up the unit, claiming that they had been searching for a business that can create synergy with its existing portfolio in the telecommunications sector.

- Japanese IT firms see Korea as the most desirable partner for cooperation for technology and business expansion. When asked to name the most ideal partners for such cooperation, 66.5% said Korea, 65.9% China and 26.9% the United States. In the Korean IT sector, they are most interested in Web solutions, followed by telecommunication/Internet service and system integration solutions.

A week in China tech

Mobile / Wireless

- Legend Group enters mobile phone market with launch of mobile phone handsets in Beijing. China's largest vendor of personal computers vowed to establish its position in the mobile telecom market within five years.

Information Technology

- Palm may meet stiff competition as it enters Chinese markets this year. Personal digital assistant maker Palm Inc. is planning to enter the China market later this year, either by setting up its own operation or by partnering with a local manufacturer. However, a host of electronics manufacturers in Japan, Taiwan and South Korea are also entering the global PDA industry. Life may become difficult for Palm in China, which is a market dominated by lower-priced local products. Palm plans to focus on corporate customers rather than the consumer market.

- Asia will lead worldwide growth in embedded design activity according to a survey conducted by Electronic Engineering Times-Asia. Globally, demand for bundled operating systems, tools, and related services is expected to grow three-fold within the next four years to hit the US$1.5 billion mark by 2006. In particular, China will enjoy unprecedented growth in the sector, the number of projects contracted will increase by five times.

A week in Taiwan tech

Life Sciences

- Publicly owned Taiwan Fertilizer will expand its high-tech special chemical investment to feed growing local high-tech firms' needs. Behind the companyÆs decision to invest NT$1 billion are expectations of strong demand for its products, especially in special chemicals used mainly in Taiwan's major TFT-LCD industry.

Telecommunications

- Far EasTone will stall overseas listing plan for a couple of years, claiming that it would be unwise for the company to sell more shares at low prices. The company is holding off in the hope that the telecoms sector will recover, hopefully in two years when third-generation (3G) wireless services gradually roll out.

Semiconductors

- Hewlett Packard, newly merged with Compaq Computers, plans to maintaining relationships with the manufacturing partners of both HP and Compaq, despite analystÆs expectations that it will consolidate its outsourcing to cut costs. HP is looking to pit suppliers against each other in a bidding war, and hopes that its strategy will help pare post-merger costs by around $2.5 billion a year. For Asian suppliers, this move will drive down prices and crunch margins.

Venture Capital / Investments

- Taiwan's Xander International to expand in Taiwan and China through M&A. The computer equipment distributions company has passed the proposal of securing a 20% to 40% stake in Xander (Hong Kong) as a first step in China. Having expanded its capitalization to $4.5 million by fund-raising based on reserved earnings, Xander will look to further expand its capitalization to between $8 million and $10 million through a new share issue in August.

A week in Singapore / Malaysia tech

Telecommunications

- State puts an end to Malaysian telecom row. The government intervened to end a hostile takeover fight between Telekom Malaysia and fallen tycoon Tajudin Ramli for control of No 2 cellular provider Technology Resources Industries (TRI). TRI chairman Mr Tajudin and three associates would resign to make way for executives from the state-controlled Telekom.

Venture Capital / Investments

- Singapore government's domestic investment arm, Temasek, will sell weak units, and considers issuing new shares. Temasek Holding Pte. Ltd. said it will sell businesses that are "no longer relevant or have no international growth potential." Temasek is also prepared to dilute its stake by issuing shares or through mergers and acquisitions in companies that have a broader regional or international potential Temasek added it will "exercise its shareholder rights to influence the strategic directions of its companies" but will continue to keep a hands-off approach in their day-to-day operations.

Information Technology

- Hopes fade for quick tech recovery in Singapore, with share prices tumbling more than 30% in the last three months. Singapore, as a whole, is also affected by the tech downturn, as exports from the sector account for some 60% of overall non-oil trade. Analysts are not optimistic about short-term prospects. "We should see a slight pickup in the third or fourth quarter, primarily due to seasonal factors," said ING Baring Securities analyst Lim Tee Wee. "But apart from seasonal demand, no other demand is coming in from corporate spending this year."

A week in Hong Kong tech

Life Sciences

- Li's CK Life to raise up to HK$2.93 billion from IPO. CK Life Sciences, the biotech venture of Asia's richest businessman Li Ka-shing, said it would raise up to HK$2.93 billion (US$375.6 million) in what has been one of the most heavily-hyped Hong Kong IPOs in recent memory.

Telecommunications

- Telstra see CSL as stepping stone to China. Telstra, which bought out Pacific Century CyberWorks' remaining stake in Regional Wireless at the weekend, says it will use the Hong Kong's No 2 mobile operator as an expansion vehicle for the Greater China region. Asked if Telstra could expand into China without CyberWorks, TelstraÆs CEO said the CSL transaction opened up more opportunities as it does not "exclude partners in other parts of Asia."

- PCCW continues sell-off in an effort to further reduce debt, amid a persistently difficult market environment for telecommunications companies. PCCWÆs chairman Richard Li told analysts that CyberWorks had identified its property division and other assets outside the core telecoms business that might be sold. PCCWÆs sale of CSL pared its net debt to $4.15 billion from $4.9 billion.

 

Mobile / Wireless

- Telstra deal sparks rumors of consolidation in mobile market. Fanning the flames of an already persistent rumor, Telstra executives said on a post-deal conference call that "consolidation was a likelihood" in Hong Kong and they would be looking to participate. Consolidation seems almost inevitable, as Hong Kong has six mobile operators for a population of just 6.7 million, and mobile penetration is at saturation levels. Beyond mergers, paring expenses is the only route to improving the bottom line.

Venture Capital / Investments

- Investment in business intelligence projects set to surge over the next few years. Research firm International Data Corp (IDC) has estimated Hong Kong's annual investments in BI-related software, computing hardware, systems-integration services, telecommunications services and networking gear will grow 7 per cent on average to reach a high of $132 million in 2006 from $96 million last year. Total demand for software, hardware and services used for BI projects in Asia Pacific, excluding Japan, will grow 23 per cent a year and become a US$3.3 billion regional market in 2006.

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